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Hi aspirant
You can participate in state quota but you must not have take admission through AIQ.
There is a penality of lakhs of rupees that vary from state to state mostly 7-10 lakhs.
That's why it is advisible that you must not freeze college or take admission in the college .
If you want college through state quota then you can participate in All India quota but don't take admission.
Hope this was helpful.
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